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Walmart and Annie's keep score of supplier sustainability

<p>How scorecards are being used to make supply chains more sustainable was the focus of two events at the GreenBiz Forum.</p>

Retail buyers play a key role in helping big companies like Walmart make their supply chains more sustainable. Bringing them onboard, however, wasn't easy, so the world's largest retailer gave buyers scorecards to assess supplier sustainability. Now 5 percent of buyers' performance objectives must come from sustainable suppliers.

"A couple of tangible tools and metrics have entirely shifted the momentum," said Brittni Furrow, Walmart's director of sustainability for food and consumables.

Furrow and other experts delved into how companies are using scorecards to boost supply chain sustainability during two panel discussions last week at the GreenBiz Forum in San Francisco. Much of the discussion focused on how Wal-Mart is using assessment criteria from the Sustainability Consortium, the nonprofit it helped to create in 2009 to measure product sustainability.

With involvement from academics as well as suppliers and farmers, the consortium weaves together a slew of lifecycle data to better understand what criteria each industry needs to track in order to assess and improve product sustainability.

The consortium's science gives Walmart a better understanding of what questions to ask its diverse range of more than 100,000 suppliers in its scorecard.

"It helps us align on how to define sustainability in beer or cereal or children's toys," Furrow said.

But sometime scorecards aren't enough to take into account the complexity of Walmart's supply chains. Many of Walmart's direct suppliers can answer questions about their operations, but understanding upstream suppliers can be the biggest challenge.

"Supply chains are fragmented," explained Karie Crisp, an independent sustainability consultant for Walmart. "Sometimes you don't know all the information with the lack of transparency and education."

Even much smaller firms such as Annie's Homegrown Inc., a food company based in Berkeley, Calif., use scorecards to assess supplier and manufacturer sustainability.

But Annie's has one important advantage over Walmart: Its sustainability efforts began when the company was founded in 1989.

Annie's recently conducted a lifecycle assessment that showed it was reducing its carbon dioxide emissions by more than 1.5 million kg by growing organic wheat, the main resource used in its products.

"It validated what we believed to be true," said Shauna Sadowski, Annie's director of sustainability.

Scorecards, however, aren't always helpful for Annie's, Sadowski noted at the Forum.

"Some farmers are doing amazing things working with the natural environment," Sadowski said. "There's no scorecard for that because it's so integrated with nature -- with root systems. Really complex stuff. A quantitative system is going to be difficult for that. That's why we need to be open to change."

But Annie's has definitely seen some benefits of using scorecards to push supplier sustainability. When the company started presenting green supplier awards for energy and water efficiency, for example, Sadowski began receiving emails from suppliers about how they might be recognized the following year.

What really makes the difference in having a sustainable supply chain comes down to the relationships between the company and suppliers, Sadowski said. Some of Annie's relationships with its suppliers and manufacturers date back to the company's founding.

"Our focus is on relationships and engagement when we're trying to get true behavior change," Sadowski said. "There needs to be conversations one on one."

Photo of John Davies, Brittni Furrow, Kim Marotta and Gary Beck by GreenBiz Group.

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